The Golden Rule of Starting Up: Product-Market Fit
Join us in a city near you at Entrepreneur’s Accelerate Your Business event series kicking off Feb 23. View cities and dates »
You can have a million-dollar idea, but if people aren't going to buy your product or service, it is worthless. To succeed, your concept must have a group of customers that want your product and will buy into it, a notion known as product-market fit.
Between my experience growing up in the real-estate industry and customer feedback, my real-estate tech company Rivolix looked to address a problem almost every realtor faces on a daily basis: helping clients find local service providers.
Often a realtor’s job doesn’t end when they sold a home to someone. He is often contacted for recommendations for cleaners, movers, cable companies, interior designers, you name it. Instead of saving information in a spreadsheet and sending it clients, our app allows realtors to have a recommended vendor list at their fingertips. While it is today a successful venture, when we launched the product, we had to ensure product-market fit before we rolled out the app.
Once we had our prototype built and received positive feedback from local realtors, we bought a booth at the National Association of Realtors annual convention. Again, the feedback we received was overwhelmingly positive, and it proved to us we had a desirable product and more importantly, a viable business. We used this confirmation as the transitioning point from concept to growth.
So before you get too far into the entrepreneurship game, make sure your company's offerings make sense for the market it is looking to target. Here are some tips to get you on the right track.
Get your product in the hands of customers ASAP. How do you know if you have a product customers want? Simply ask them. Get your product in their hands and see if they would pay for it. If the feedback you receive is positive, this proves market validation and chances are you have a viable business. From here you need to stay focused and ensure you can deliver on what you promised to your clients.
Receiving negative feedback can hurt your ego, but it is also exactly what you needed to hear. If customers aren't too keen on your product, take their feedback and tweak your product accordingly. It is best to look for patterns, meaning don't change the product if only one person has an issue with it. Rather if the same feedback keeps coming up, you should then address the problem.
While getting feedback seems like an obvious step, I have seen a lot of entrepreneurs fail to do it. The sooner you can address the needs of your customers, the sooner you will get paid.
Attend an industry trade show. To validate your product and show it to a variety of customers in one place, an industry trade show is a must. This will enable you to gain valuable face-to-face time with customers and learn of other issues you may be able to address with your product.
While it can be costly, in my opinion, it is worth shelling out a few thousand dollars to buy a booth, as you are able to confirm the product you are building is something customers will actually buy. Trade shows also provide a rolodex of potential new clients and industry contacts.
Find a mentor in the industry. Snagging a mentor is key when building a product for a specific industry, as they have the experience, credibilty and connections you may not have when starting out. While some entrepreneurs may be concerned about finding mentors to support their venture, I believe if your product is good enough, scoring industry veterans will not be a challenge. They have been in the industry long enough to know if a product has a chance at success.